Retail inflation cools to 3.69% in August

download (1).jpgSource: The Hindu Business Line, Sept 12, 2018

New Delhi: For many hapless consumers who are ravaged by the effects of the weak rupee and soaring domestic fuel prices, there was some solace on Wednesday in the form of good news on the retail inflation and industrial output front.

Retail inflation came in at a 10-month low of 3.69 per cent for August as compared to 4.17 per cent in the previous month. However, the latest Consumer Price Index (CPI)-based inflation print was higher than the 3.28 per cent level recorded in August last year.

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Inflation cools to 9-month low of 4.17% in July, down from 4.9% in June

Source: The Economic Times, Aug 13, 2018

NEW DELHI: Retail inflation in the country eased more than expected to a nine-month low in July due to a sharp decline in price increase of food and beverages, kindling hopes that the Reserve Bank of India will stop raising interest rates.

Inflation based on consumer price index (CPI) eased to 4.17% in July from 4.92% in June while food inflation more than halved to 1.37% from 2.91%, data released by Central Statistics Office (CSO) on Monday showed. Economists expected consumer inflation of about 4.5% in July. Read the rest of this entry »

RBI strikes another blow in inflation fight

Source: The Hindu Business Line, Aug 01, 2018

Mumbai: The Monetary Policy Committee of the Reserve Bank of India on Wednesday decided to increase the repo rate by 25 basis points to 6.5 per cent, as it remained concerned about rising inflation.

“Consequently, the reverse repo rate under the LAF stands adjusted to 6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.75 per cent,” the RBI said in its the third bi-monthly monetary policy statement.Though the prices remained below its estimated trajectory, the RBI has forecast retail inflation at 4.6 per cent in the second quarter of the fiscal, 4.8 per cent in the second half of the fiscal and five per cent for the first quarter of 2019-20.

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Inflation likely to average 4.7% this fiscal, RBI may tighten rates

Source: Business Standard, Jul 26, 2018

New Delhi: A good monsoon notwithstanding, inflation is expected to average 4.7 per cent in the current fiscal, up from 3.6 per cent last year and Reserve Bank of India is likely to tighten the key interest rates in the coming months, says a DBS report.

According to the global financial services major, good rains will support agricultural growth but a material respite to inflation will hinge on factors like oil prices, the value of rupee against the US dollar and fiscal dynamics.India’s southwest monsoon has recovered in the past week. Crop sowing activity is catching up, along with an improvement in the reservoir levels.

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WPI hits 54-month high, jumps to 5.77% in June

Source: The Hindu Business Line, Jul 16, 2018

New Delhi: The producer’s inflation zoomed to a 54-month high in June, Government data revealed on Monday. This inflation, popularly known as Wholesale Price Index (WPI), stood at 5.77 per cent in June as against 4.43 per cent for May.

WPI follows retail inflation (CPI), which rose to a five-month high of 5 per cent in June, while industrial production slipped to 3.2 per cent in May, Now, both key inflation indices are rising, and the possibility of the RBI’s Monetary Policy Committee considering another rate hike at its next policy meeting, is high. The committee is to meet under the Chairmanship of RBI Governor Urjit Patel early next month.

Aditi Nayar, Principal Economist at ICRA, said the lagged transmission of higher crude oil prices, an uptick in cotton prices and electricity tariffs, the hardening of inflation for manufactured products as well as an unfavourable base effect, led to a sharp pickup in WPI inflation. An unfavourable base effect as well as a revision in electricity tariffs, and prices of ATF, LPG, naphtha and furnace oil, contributed to the considerable rise in inflation for fuel and power to 16.2 per cent in June from 11.2 per cent in May.  Read the rest of this entry »

India June inflation likely reached highest level in nearly 2 years: Reuters poll

imagesSource: The Economic Times, Jul 10, 2018

Indian inflation likely rose to a near two-year high in June, driven by surging oil and food prices, a Reuters poll showed, a development that would strengthen calls for more monetary policy tightening by the Reserve Bank of India.

According to a July 4-9 Reuters poll of 37 economists, retail prices rose at an annual 5.30 percent last month. That would be the fastest since July 2016, well above May’s 4.87 percent and keep inflation above the central bank’s 4 percent target for an eighth straight month.

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India’s rural inflation has started pinching

Source: Financial Express, Jun 29, 2018

New Delhi: The Reserve Bank of India’s (RBI) unanimous call for a 25-basis-point rate hike after four years was primarily driven by the strengthening core inflation as well as the rising household inflationary expectations. Since the April Monetary Policy Committee meeting, there have been some significant macro developments, mainly on four counts.

First, the global crude oil prices have risen by about $10 per barrel. Second, the rupee has depreciated by almost 5%. Third, the three-month and one-month ahead inflationary expectations have risen by 90bps and 130bps, respectively. Fourth, core inflation has jumped by 50bps to 6% in May 2018 as compared to 5.5% in March 2018. Read the rest of this entry »